Sharing economy faces obstacle as Aurora wrangles with room-renting

AURORA | Travelers looking for affordable lodging in Aurora may soon have one less avenue to peruse.

City officials began investigating how to regulate, tax and zone hosts of the popular vacation rental website Airbnb.com this spring, after the neighbor of an Airbnb host complained about the practice to the city’s planning division.

Saurabh Chawla said that he and his wife, Neha, used the website — which connects vacationers seeking lodging with verified hosts willing to rent out all or part of a private residence — to host about 55 people at their home on East Dry Creek Place in Aurora between January and mid-April. It was then that the couple received a cease and desist order from the city claiming that they had violated their residential zoning code for operating a bed and breakfast without a city business license.

Saurabh Chawla stands outside of his house on Friday July South Aurora. Chawla had been a host for Airbnb since January until he was asked to stop by the city because of a zoning violation. Photo by Gabriel Christus/Aurora Sentinel

“(The neighbor) said it was a safety concern, which is hard to understand because there’s a screening process on the website, and we do a screening process of our own,” Saurabh said. “It’s not like they’re complete strangers coming into your home, you kind of have this interaction beforehand, and I work from home so there’s really very little room for things to go wrong. I think the city’s still just wrapping its head around the idea.”

Since issuing Saurabh a zoning violation order, the city’s tax and licensing division, planning and development services department, as well as Ward VI City Councilman Bob Broom, have reeled to sort out how to decipher the issue. After mulling a slew of options, officials have decided to push the topic to city council, a process that will begin with a discussion by the planning and economic development committee on Aug. 12.

“Ultimately, it’s a policy decision for council,” said Trevor Vaughn, manager of the tax and licensing division. “There’s the varying codes, which beg the questions of is it a licensing issue? A land use issue? A zoning issue? And it’s kind of all of the above. Instead of piecemealing it together, we wanted to actually go to council and clarify the policy on it.”

Vaughn said that there’s nothing in the licensing code that addresses the issue of vacation rentals by owner, but a primary concern is how to collect taxes — particularly lodgers tax — from hosts. He said that the city currently charges hotels an 8-percent lodgers tax, on top of another sales tax of 4.75 percent in Adams County and 4.25 percent in Arapahoe County. The city asked Airbnb in February to collect lodgers tax from its customers when they perform transactions online, but the company refused, according to Vaughn.

He said that there are currently about 40 Airbnb hosts serving Aurora visitors, according to anecdotal data collected by the tax and licensing division. That’s a number nearly 10 times what it was early last year.

As of now, the city is dealing with each host on a case-by-case basis, though Saurabh’s is the only instance of hosting in Aurora the city has been made officially aware of, according to Vaughn.

Planning division officials offered Saurabh the option of taking his case to a public hearing earlier this summer, an action that would allow him to argue his case for using his home as an Airbnb accommodation. Under current zoning code regulations, it would be possible for Saurabh to host visitors as a conditional use, a stipulation that would require him to then get the approval of all adjoining property owners and homeowners associations within a one-mile radius of his residence, according to Jim Sayre, manager of Aurora’s planning division. Saurabh declined to pursue the six- to eight-week process.

“He’s still welcome to take that option,” Sayre said.

Prior to being shut down, Saurabh was charging guests $48 a night, and had just received the coveted title of Airbnb “super host.” That title is the result of more than 35 positive reviews, he said.

He said that there are currently about 40 Airbnb hosts serving Aurora visitors, according to anecdotal data collected by the tax and licensing division. That’s a number nearly 10 times what it was early last year.

“But we can’t really use it, so it’s just sitting there,” he said.

Saurabh added that he and his wife hosted about 45 Airbnb guests in their former home in Dallas without issue. In Aurora, he said the majority of his clientele was composed of people looking to stay close to Denver International Airport, students in town to interview at the University of Colorado Anschutz Medical Campus, and young professionals flying in for job interviews in Downtown Denver.

“You make a lot of friendships out of this by sitting with guests and talking about their life, culture and background,” Saurabh said. “Sometimes we would even share meals at night, and it was nice because you meet people you never would have met in your life. That was the biggest thing for us.”

The Chawlas join a growing pool of Airbnb hosts across the country who are mired in red tape while cities attempt to figure out how to regulate the growing sharing economy. Locally, Boulder issued a citywide ban on renting out residences for any period under 30 days this spring, and Denver is still in the study phase of deciding how to proceed with industry supervision. New York City banned the practice altogether more than two years ago.

The hotel industry has been one of the central opponents to the notion of temporary rentals in recent years, though Aurora tourism officials have yet to put up much of a protest, according to Gary Wheat, president and CEO of Visit Aurora. Wheat has acted as the liaison between local hoteliers and Aurora officials in recent months and said that hotel owners just want to ensure fairness in the marketplace.

“Their point of view is that they want to make sure it is a level playing field and there are regulations in place to protect the traveler, but also to makes sure that the people doing these (Airbnb) are in compliance with city regulations, tax codes and things of that nature,” Wheat said.

After being discussed by the planning and economic development committee, the issue of vacation rentals by owner in Aurora is expected to be tabled at a city council study session in September.

City Councilman Bob Broom, who oversees the ward in which Saurabh lives, said that he doesn’t sway one way or another on the issue, but that he doesn’t favor additional oversight on enterprise.

“In general, I’m kind of anti-regulation” he said. “I don’t know the extent to which this takes place in Aurora, but if my next-door neighbor did this and I was made aware, why would I care? I think it would be like a neighbor having a nephew over to stay with them or something.”